Employment Rights Bill

Jonathan Reynolds Excerpts

Report stage & 3rd reading
Wednesday 12th March 2025 Commons Chamber

Bill read the Third time and passed.

[The Secretary of State for Business and Trade (Jonathan Reynolds)]

On a point of order, Madam Deputy Speaker. It has come to my attention that in a speech that I gave on 28 April 2014, recorded in column 614 of Hansard, on the subject of high-speed rail, I made a reference to my experience of using our local transport system in Greater Manchester when

“I worked as a solicitor in Manchester city centre.”—[Official Report, 28 April 2014; Vol. 579, c. 614.]

I should have made it clear that, specifically, that was a reference to being at the time a trainee solicitor. This was an inadvertent error and, although the speech was over a decade ago, as it has been brought to my attention, I would like to formally correct the record, and I seek your advice on doing so.

[Madam Deputy Speaker (Judith Cummins)]

I thank the right hon. Member for giving advance notice of his point of order and for placing his correction on the record.

Making Work Pay: Consultation Responses

Jonathan Reynolds Excerpts

Tuesday 4th March 2025 Written Statements

[The Secretary of State for Business and Trade (Jonathan Reynolds)]

The Government’s plan to make work pay is a core part of our mission to grow the economy, raise living standards across the country and create opportunities for all. It will tackle the low pay, poor working conditions and poor job security that has been holding our economy back. The landmark Employment Rights Bill (ERB) will benefit more than 10 million workers in every corner of the country.

We are committed to working with all stakeholders on how to best put these measures into practice. In October the Deputy Prime Minister, the Secretary of State for Work and Pensions and I launched an initial package of four consultations, with the potential to inform amendments to the ERB. We greatly appreciated the many detailed responses we received. The insights we have gained from businesses, trade unions, representative organisations, civil society, and others have been invaluable in developing proportionate and effective policy.

Today we are publishing the Government’s response to each consultation on gov.uk, including our next steps, as well as the Government’s response to a consultation undertaken by the previous Government on tackling non-compliance in the umbrella company market. I will also be tabling a number of amendments to the Employment Rights Bill today for consideration at Report stage, reflecting the outcomes of these consultations.

The Government are committed to continuing with this approach through full and comprehensive consultation on the implementation of Make Work Pay to ensure that the changes we are making work for both workers and businesses of all sizes.

Consultation 1: The application of zero hours contracts measures to agency workers

The Government believe that every worker should be able to access a contract which reflects the hours they regularly work. We believe this should extend to agency workers, not only to offer them greater certainty of hours and security of income, but to ensure that agency work does not become a loophole in the plans to end exploitative zero hours contracts. We also recognise the important role that the temporary work sector plays in both the public and private sector, and the need for employers to retain flexibility in their workforces. This consultation sought views on how to apply zero hours contract measures to agency workers, receiving 629 responses from a broad range of stakeholders.

Based on the consultation responses and further stakeholder engagement, we will table amendments to the Employment Rights Bill which would allow the Government to implement the zero hours contracts rights for agency workers. We believe it is important to narrow the broad power currently in the Bill so that end hirers, agencies and agency workers are clear where responsibilities will sit in relation to the new rights. The obligation to provide a guaranteed hours offer will rest with the end hirer, but legislation will maintain flexibility to place the obligation on agencies or other intermediaries instead, in certain scenarios, which will be set out in secondary legislation. Both the end hirer and agency will be responsible for providing an agency worker with reasonable notice of shifts, shift cancellations and changes to shifts. Agencies will be responsible for making payments to workers which result from short notice cancellations, movements or curtailments of a shift. Agencies and hirers will remain free to negotiate terms which may allow these costs to be recouped from the hirer where the hirer was in fact responsible for the change. In the case of pre-existing contracts, legislation will allow agencies to recoup these costs to the extent the hirer was responsible.

Significant details of the legislation will be set in regulations. We will take the necessary time to consult on the regulations, to ensure clear, detailed and workable provisions. We will continue to engage with employer organisations, the recruitment sector and trade unions to identify the best way to achieve the policy objective of extending rights for agency workers without causing unintended consequences to employment agencies and end hirers.

Consultation 2: Creating a modern framework for industrial relations

This consultation sought views on proposals to update the legislative framework in which trade unions operate to align it with modern work practices, removing unnecessary restrictions on trade union activity and ensuring industrial relations are underpinned by collaboration, proportionality, accountability, and a system that balances the interests of workers, businesses and the wider public. This consultation received 165 responses from a range of stakeholders.

We will table amendments to improve the process and transparency around trade union recognition and access, including streamlining the trade union recognition process and strengthening protections against unfair practices. This includes addressing unfair practices to prevent mass recruitment designed to influence the bargaining unit and prevent recognition being granted; a new fixed timeline for employers and trade unions to agree access arrangements for recognition purposes; removing the requirement to prove that an unfair practice influenced voting behaviour; extending the code of practice on access and unfair practices from the point the CAC accept a recognition application; and extending the unfair practice complaint timeframe from 24 hours to five days. We will also amend the Bill so that independent unions can apply for recognition where an employer has voluntarily recognised a non-independent union following receipt of a formal request for voluntary recognition by the independent union.

We will also table amendments to extend the trade union access provisions to cover digital access, in line with modern-day workplaces, while also introducing a fast-track route for achieving an “off-the-shelf" access agreement where certain conditions are met, alongside a mechanism to ensure there are robust penalties in place for non-compliance.

As part of our efforts to remove unnecessary bureaucratic hurdles, and deliver a balance between allowing for effective industrial action, while also ensuring that employers are able to reasonably prepare, we will amend the ERB to abolish the 10-year requirement for unions to ballot members on political fund maintenance, simplify the information requirements for industrial action ballots and notice to employers, extend the expiry of mandate for industrial action from six to 12 months, and ensure that trade unions provide a 10-day notice period for industrial action.

The Government also want to ensure that trade unions have a meaningful mandate to support relationships and negotiation with employers and deliver effective dispute resolution. That is why we are committed to making balloting more accessible by delivering e-balloting, which we anticipate will increase participation in statutory ballots and demonstrate clear mandates. We will launch a working group with trade unions and businesses imminently. While we continue to engage on how to ensure that trade unions are able to secure a meaningful mandate for industrial action, and as the other reforms to trade union legislation come into force, the Government will table an amendment to the ERB specifying that the repeal of the 50% industrial action ballot turnout threshold will be subject to commencement on a date to be specified in regulations. The intention behind this approach is to align as closely as possible the removal of thresholds with the introduction of e-balloting. This will ensure that industrial action mandates will have demonstrably broad support.

Consultation 3: Strengthening remedies against abuse of rules on collective redundancy and fire and rehire

This consultation sought views on increasing the maximum period of the protective award for failing to adhere to collective consultation requirements, and on applying interim relief to fire and rehire and collective redundancy scenarios. We received 195 responses, from a range of stakeholders.

We will table an amendment to increase the maximum period of the protective award to 180 days (up from the current maximum of 90 days). Increasing the maximum value of the award means an employment tribunal will be able to grant larger awards to employees for an employer’s failure to meet consultation requirements.

The Government want to enhance the deterrent against employers deliberately ignoring their collective consultation obligations and ensure it is not financially beneficial to do so. The Government are not proposing to bring forward the proposals to make interim relief available for either collective redundancy or fire and rehire scenarios. The most overarching and prominent theme from the responses on this section of the consultation is that it would be difficult to implement interim relief in practice, and the complexities for the employee in bringing a claim would outweigh any benefits in doing so. We will keep the area under review though and if it is found that further measures are needed, we will look to introduce them.

Consultation 4: strengthening statutory sick pay

Through the Employment Rights Bill, we are removing the waiting period so that SSP is paid from the first day of sickness absence and extending eligibility to those earning below the lower earnings limit.

We are introducing a new rate for statutory sick pay which will be paid to the lowest earners, including all those earning below the lower earnings limit. An employee will be entitled to the flat rate or a percentage of their earnings, whichever is lower. We consulted on what this percentage rate of earnings should be.

Following this consultation, and together with the Secretary of State for Work and Pensions, I am today tabling an amendment to set the percentage rate of statutory sick pay that will be paid up to the flat rate of SSP at 80% of an employee’s normal weekly earnings. This percentage rate provides a fair earnings replacement and strikes the right balance between providing financial security to employees who are unable to work due to sickness, while also limiting additional costs to businesses.

The Secretary of State for Work and Pensions will also publish the full Government response to the consultation on statutory sick pay, which sets out the findings and rationale in more detail, and will submit the Government’s response to the Work and Pensions Select Committee report on statutory sick pay.

Consultation 5: Tackling non-compliance in the umbrella company market consultation

In 2023 the previous Government consulted on proposals to regulate umbrella companies and options to tackle tax non-compliance in the umbrella company market, but no action was taken to address this. This means that many workers are unaware of who is responsible for providing their employment rights, or whether they are entitled to any employment rights at all. Many have reported a lack of pay-related transparency and mishandling of pay (typically, non-transparent deduction from wages). Yet the Employment Agency Standards Inspectorate is currently unable to take action against non-compliant umbrella companies, as they do not fall within scope of the legislation covering employment agencies and employment businesses.

We will therefore table an amendment to the Employment Rights Bill to expand the scope of the Employment Agencies Act 1973, allowing umbrella companies to be regulated for the purposes of employment rights. We will set out the detail in regulations following further consultation, aiming to ensure that workers have comparable rights and protections when working through an umbrella company as when taken on directly by an employment business.

Next steps for consultation

This package represents the first phase of formal public consultations on how best to put our plans into practice. We have committed to full consultation on the implementation of this legislation, and expect this to begin this year, ensuring reforms work for employers and workers alike.

[HCWS490]

UK Trade Envoy Programme

Jonathan Reynolds Excerpts

Tuesday 28th January 2025 Written Statements

[The Secretary of State for Business and Trade (Jonathan Reynolds)]

The Secretary of State has today appointed 32 Parliamentarians covering 79 markets to the United Kingdom’s trade envoy programme.

The United Kingdom’s trade envoys will play an integral role in the Government’s growth mission and delivering our plan for change by helping to create opportunities for UK business to compete abroad, break into new markets and attract greater inward investment from their markets.

They will play a crucial role in supporting my Department’s growth priorities, in particular through helping deliver the industrial and trade strategies and attracting foreign direct investment to every region in the UK. They complement the work of our ambassadors, high commissioners and His Majesty’s trade commissioners in their respective markets by engaging with their host Governments, leading trade delegations, hosting inward delegations, meeting businesses in the UK and in market, and lobbying on market-access issues.

The role as a United Kingdom trade envoy is unpaid and voluntary with cross-party membership from both Houses.

The Secretary of State is pleased to appoint:

The hon. Member for Richmond Park (Sarah Olney MP) as the United Kingdom’s Trade Envoy to North Africa.

The hon. Member for Bolton South and Walkden (Yasmin Qureshi MP) as the United Kingdom’s Trade Envoy to Egypt.

The hon. Member for Leyton and Wanstead (Calvin Bailey MP) as the United Kingdom’s Trade Envoy to Southern Africa.

The hon. Member for Chelsea and Fulham (Ben Coleman MP) as the United Kingdom’s Trade Envoy to Morocco and Francophone West Africa.

The right hon. Baroness Ramsey of Wall Heath (Jane Ramsey) as the United Kingdom’s Trade Envoy to Ethiopia.

The hon. Member for Clapham and Brixton Hill (Bell Ribeiro-Addy MP) as the United Kingdom’s Trade Envoy to Ghana.

The hon. Member for Vauxhall and Camberwell Green (Flo Eshalomi MP) as the United Kingdom’s Trade Envoy to Nigeria.

The hon. Member for Edmonton and Winchmore Hill (Kate Osamor MP) as the United Kingdom’s Trade Envoy to East Africa.

The hon. Member for Tooting (Dr Rosena Allin-Khan MP) as the United Kingdom’s Trade Envoy to South Africa.

The right hon. Lord Spellar of Smethwick (John Spellar) as the United Kingdom’s Trade Envoy to Australia.

The hon. Member for Neath and Swansea East (Carolyn Harris MP) as the United Kingdom’s Trade Envoy to New Zealand.

The right hon. Lord Watson of Wyre Forest (Tom Watson) as the United Kingdom’s Trade Envoy to the Republic of Korea.

The right hon. Lord Faulkner of Worcester (Richard Faulkner) as the United Kingdom’s Trade Envoy to Taiwan.

The hon. Member for Bradford West (Naz Shah MP) as the United Kingdom’s Trade Envoy to Indonesia and ASEAN.

The hon. Member for Warwick and Leamington (Matt Western MP) as the United Kingdom’s Trade Envoy to Thailand, Vietnam, Cambodia and Laos.

The hon. Member for Mid Norfolk (George Freeman MP) as the United Kingdom’s Trade Envoy to Malaysia, Philippines, Singapore and Brunei.

The hon. Member for Washington and Gateshead South (Sharon Hodgson MP) as the United Kingdom’s Trade Envoy to Japan.

The hon. Member for Manchester Rusholme (Afzal Khan CBE MP) as the United Kingdom’s Trade Envoy to Türkiye.

The hon. Member for Leeds Central and Headingley (Alex Sobel MP) as the United Kingdom’s Trade Envoy to Ukraine.

The right hon. Lord Austin of Dudley (Ian Austin) as the United Kingdom’s Trade Envoy to Israel.

The hon. Member for Hendon (David Pinto-Duschinsky MP) as the United Kingdom’s Trade Envoy to Switzerland and Lichtenstein.

The right hon. Lord Alderdice (John Alderdice) as the United Kingdom’s Trade Envoy to Azerbaijan and Central Asia.

The right hon. Lord McNicol of West Kilbride (lain McNicol) as the United Kingdom’s Trade Envoy to Jordan, Kuwait and Palestine Territories.

The hon. Member for Bedford (Mohammad Yasin MP) as the United Kingdom’s Trade Envoy to Pakistan.

The hon. Member for Liverpool Walton (Dan Carden MP) as the United Kingdom’s Trade Envoy to Mexico.

The hon. Member for Leeds North East (Fabian Hamilton MP) as the United Kingdom’s Trade Envoy to Southern Cone.

The hon. Member for Birmingham Erdington (Paulette Hamilton MP) as the United Kingdom’s Trade Envoy to Commonwealth Caribbean.

The right hon. Lord Liddle (Roger Liddle) as the United Kingdom’s Trade Envoy to Andean.

The hon. Member for Whitehaven and Workington (Josh MacAlister OBE MP) as the United Kingdom’s Trade Envoy to Brazil.

The hon. Member for Newport East (Jessica Morden MP) as the United Kingdom’s Trade Envoy to Central America.

The right hon. Lord Hannett of Everton (John Hannett OBE) as the United Kingdom’s Trade Envoy to Sri Lanka.

The right hon. Baroness Winterton of Doncaster (Rosie Winterton DBE PC) as the United Kingdom’s Trade Envoy to Bangladesh.

The new title of United Kingdom trade envoy programme better reflects the envoys’ duties in representing the whole United Kingdom, with the support of the Prime Minister, Secretary of State and Ministers.

[HCWS392]

Assimilated Law Report

Jonathan Reynolds Excerpts

Thursday 23rd January 2025 Written Statements

[The Secretary of State for Business and Trade (Jonathan Reynolds)]

Today I have laid a report regarding the Retained EU Law (Revocation and Reform) Act 2023 (REUL Act) before Parliament and published it on gov.uk. This report updates the House in line with the obligations under section 17 of the REUL Act, which requires a report to be published and laid before Parliament every six months detailing all revocations and reforms of assimilated law. This is the third report being laid before the House.

The report today summarises the data on the assimilated law dashboard, providing the public with information about the amount of assimilated law there is and where it sits across Departments. The dashboard reflects the position as of 23 December 2024, showing that a total of 6,901 instruments of REUL/assimilated law concentrated over approximately 400 unique policy areas are on the dashboard. Since the previous update to the dashboard 40 assimilated law instruments have either been revoked or reformed, meaning that 2,395 have now been revoked or reformed in total.

The report gives details of a further 11 statutory instruments using powers under the REUL Act and other domestic legislation, which the Government have laid since the previous report to deliver on their priorities. These include, for example, the Ionising Radiation (Medical Exposure) (Amendments) Regulations 2024, which contain legislative amendments that maximise the efficiencies provided by technological advancements and, in turn, allow for the faster diagnosis of cancers, personalised patient treatment, and a reduction in workforce pressures, all while safeguarding patient safety. These changes support the delivery of the Government’s health mission priorities.

This Government are determined to support economic growth, which is why we are working with industry and businesses to deliver our industrial strategy and small business plan to improve economic opportunities. Delivering these strategies requires the right regulatory frameworks to support innovation, economic growth, investment, and high-quality jobs. We will reform assimilated law, where desirable, to deliver that vision, and to deliver growth for UK businesses and citizens.

This Government will also consider the future reform of assimilated law within the wider context of their national missions, plans for change, and commitment to reset relations with devolved Governments and the EU.

[HCWS384]

Competition and Markets Authority: Appointment of Chair

Jonathan Reynolds Excerpts

Wednesday 22nd January 2025 Written Statements

[The Secretary of State for Business and Trade (Jonathan Reynolds)]

This Government have a clear mission to drive economic growth and aim for the highest sustained growth in the G7. The Prime Minister has been clear that he expects regulators to play their part in delivering these ambitions.

The Government are today announcing the appointment of Doug Gurr as the chair of the Competition and Markets Authority on an interim basis. This follows the resignation of Marcus Bokkerink, which has been accepted by the Secretary of State for Business and Trade. Doug will join the CMA board, working alongside Sarah Cardell in her role as CEO.

The Government are grateful to Marcus for his leadership of the CMA over the last two and a half years and wish to place on the record our thanks for his efforts, achieving the ambitions he set at the start of his tenure and more. All regulators, including the CMA, have a key role to play in driving growth, and this transition will enable a fresh strategic vision at the heart of our competition authority. Doug brings with him experience as an entrepreneur and in the technology and groceries sectors, as well as non-executive leadership, including in artificial intelligence—skills and experience that will be critical as the CMA takes on the challenges of the modern economy. The Government are confident that with fresh leadership on the board, as well as the existing strong leadership and the welcome commitments made by the CMA to supporting economic growth, the organisation will be well positioned to play its part in our collective mission to grow the UK economy.

[HCWS380]

Future of Harland & Wolff

Jonathan Reynolds Excerpts

Thursday 19th December 2024 Written Statements

[The Secretary of State for Business and Trade (Jonathan Reynolds)]

National security is the foundation of our plan for change—without it we cannot deliver on our milestones to raise living standards across the UK, with good, skilled, productive jobs.

I am pleased to announce that a commercial deal has been reached, subject to approvals, that will see Navantia UK—a specialist in shipbuilding—purchase Harland & Wolff’s shipyards in Belfast, Arnish and Methil in Scotland, and Appledore in Devon. This industry-led deal will secure the future of all four of Harland & Wolff’s shipyards and protect around 1,000 jobs across the UK.

The deal will ensure the delivery of the Ministry of Defence’s fleet solid support (FSS) contract. The Government have worked closely with Navantia UK on the future of the FSS programme. We have agreed with Navantia UK on the absolute minimum of changes to the contract, ensuring its continued delivery.

Defence is at the heart of the industrial strategy, where we have identified it as one of eight growth-driving sectors for the UK economy. Our industrial strategy is unreservedly pro-business, engaging on complex issues that are barriers to growth and investment.

Navantia UK has committed to invest significantly on commercial terms into Harland & Wolff’s shipyards, a major investment into the UK’s industrial base. This is a good deal for Harland & Wolff, its employees, and the British shipbuilding sector more broadly, as it provides the best opportunity to sustain essential sovereign shipbuilding capacity and capability for future naval work, safeguarding both current and future jobs in the UK.

We are committed to supporting vibrant and successful shipbuilding and offshore fabrication industries, and our skilled workforces who deliver them, in all parts of the UK, in which Harland & Wolff has an important role to play.

[HCWS344]

Harland & Wolff

Jonathan Reynolds Excerpts

Thursday 19th December 2024 Commons Chamber

[The Secretary of State for Business and Trade (Jonathan Reynolds)]

With your permission, Madam Deputy Speaker, I shall make a statement on the UK shipbuilding firm Harland & Wolff. I am pleased to inform the House that, subject to approvals, a commercial deal has been reached that will protect jobs, drive investment and secure the future of the workforce. The deal will see Navantia UK, a specialist in shipbuilding, purchase all of Harland & Wolff’s shipyards.

As right hon. and hon. Members will know, Harland & Wolff is a major employer in Belfast, with additional important yards at Arnish and Methil in Scotland and Appledore in Devon. For more than 150 years, the firm has built famous vessels for notable shipping organisations and companies, including the Royal Navy, the Royal Mail and the White Star Line. This industry-led deal, which we expect to complete shortly, will secure all four of Harland & Wolff’s shipyards, protecting around 1,000 jobs right across the UK. I hope that this announcement will come as some relief to Harland & Wolff’s employees. I realise that this has been a deeply worrying time for them, and for everyone affected by the continued speculation over the firm’s future. I welcome Navantia UK’s intention to work closely with the relevant unions to protect workers’ existing terms and conditions. That is important for the hard-working employees and communities who have served the firm over many years.

I was first informed that Harland & Wolff was in serious financial difficulty on day one of the new Government. As the previous Government had open-book arrangements with the company, it was clear that the firm had significant and unsustainable debts. Members will be aware that, at that point, Harland & Wolff was seeking a Government guarantee or liquidity loan. Had that occurred, the British taxpayer would have been put at significant risk of losing millions of pounds, without the safeguarding of any yards, jobs or ships. I believe that the possibility of the Government providing such a guarantee or loan, which was much speculated on in the press, was preventing a market-based solution. The former Government’s inability to make a decision left the yards and the workforce in limbo. That is why I made it clear in my first weeks in this job that no taxpayer guarantee or loan would be provided. I was dismayed that when I did so Conservative Members opposed that, knowing as they did that with a guarantee or loan there stood a significant risk of losing an eye-watering amount of taxpayers’ money. That was deeply irresponsible.

Crucially, the deal that has been agreed will secure the delivery of the fleet solid support contract of the Ministry of Defence. The Government have worked closely with Navantia UK on the future of the FSS programme. We have agreed the absolute minimum of changes to the contract to ensure its continued delivery. Navantia UK is the prime contractor of the Team Resolute consortium, which is charged with building three logistics support vessels for the Royal Navy, and it will maintain the required portion of UK-only build as part of this deal. It is also worth saying that FSS is a vital component of the UK carrier strike capability, providing munitions, spares and stores. At a time when strategic alignment with our NATO allies is more critical than ever, the Government fully endorse this deal, which will also see Navantia UK invest significantly on commercial terms in Harland & Wolff shipyards.

Anyone familiar with Navantia UK will know that the firm boasts strong expertise in naval shipbuilding. I am pleased that, thanks to this agreement, it will continue to bring the next generation of technology to its operations here in the UK. This is quite simply a good deal for the Harland & Wolff shipyards, a good deal for its employees, and a good deal for British shipbuilding. It provides the best opportunity to sustain our essential sovereign shipbuilding capacity and capability, now and over the long term. Defence is at the heart of the industrial strategy that we have identified. Defence is one of our eight growth-driving sectors of the UK economy. That industrial strategy is unreservedly and unashamedly pro-business, engaging on complex issues that are currently barriers to growth and investment. National security is one of the foundations of our plan for change. Without it, we cannot deliver on our milestones to raise living standards across the UK, with good, skilled, productive jobs like those at Harland & Wolff.

UK shipbuilding alone supports some 42,500 jobs nationwide and adds £2.4 billion to the economy every single year. We recognise how important it is, as a vital pillar of our civil and defence industrial base. That is why my Department, together with the Ministry of Defence and the National Shipbuilding Office, is doing everything that we can to bolster our world-class shipbuilding industry. That includes the significant progress that we are making on key procurement programmes. We have a major contract with BAE Systems, which has increased the order from three to eight Type 26 anti-submarine warfare frigates on the Clyde, and a contract with Babcock for five Type 31 general purpose frigates at Rosyth. Those projects have already brought significant recapitalisation investment to shipyards throughout the UK, and there are further procurements to be won, ranging from Border Force and local councils to marine in-port service vessels at His Majesty’s naval bases.

The Government are absolutely committed to supporting vibrant, growing and successful shipbuilding and fabrication industries across the country, and I pay tribute to the skilled, diligent workforces who have made these industries what they are today. Thanks to the deal that has been announced, workers in Belfast, Arnish, Methil, Appledore and right across the country can be confident that the Government are squarely behind them, that UK ship- building is secure, and that together, as a United Kingdom, we will lead the sector into a better future. I hope that all workers in all four yards are now able to enjoy this Christmas with their families, as they should. I commend this statement to the House.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the shadow Secretary of State.

--- Later in debate ---

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Secretary of State. Having served in his Department, I too will be paying close attention to the answer.

[Jonathan Reynolds]

I agree with the shadow Secretary of State on the iconic nature of this business; its role in British history and in the community, particularly in Belfast; and the esteem in which it is held. I do feel he could have thanked us for cleaning up another mess that the previous Government left us, although perhaps that is too much to ask. After all, they could have made the decisions to allow the market-based solution with support from Government that we have been able to achieve. Despite those caveats, I welcome the fact that he welcomed the news and recognised it as a substantial good news story for many workers as we go into Christmas and for the next years.

I turn to the hon. Gentleman’s specific questions. On the delivery of the fleet solid support contract, the issues that the previous Government left us may have some material impact, although there is no large, foreseen delay to the delivery of the project at this stage. On the support to the business, there is no support going directly from Government to the business to subsidise the transaction. There have been amendments to the contracts supported by my Department and the Ministry of Defence. He asked for the details. I will not reveal it in the House because of the commercial sensitivity, but I will find out whether there is a way to share that with him. On whether the deal is compliant with the Windsor framework and our commitments as a country under those arrangements, I am satisfied with all that. Despite the fact that we will always respect those arrangements, we are the UK Government and we make decisions for every part of the UK, with the regulatory approvals, and I seek no one’s permission to be the Secretary of State for Business and Trade across all the UK.

On additional work packages, there are no additional promises from the Government, although he will know that there is a 30-year supply pipeline for shipbuilding in the UK and many opportunities, particularly in sectors such as energy, maintenance and fabrication, and a whole range of functions where Members across the House would want to have a strong, diverse and competitive shipbuilding and maintenance sector.

Finally, on defence spending, the hon. Gentleman had a bit of a try-on. He asked what assurances the sector can have. The biggest assurance I can give is that we only ever hit that 2.5% under Labour Governments. The fact is that we have a Labour Government with that commitment to the defence sector and its role—the ability to deliver maximum economic benefits for the UK, as well as that vibrant and important defence role—and we will continue to deliver on the way to that.

[Madam Deputy Speaker]

I call the Chair of the Business and Trade Committee.

[Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)]

Congratulations to the Secretary of State. This is excellent news for the people of Appledore and of Northern Ireland and for workers across the Harland & Wolff supply chain. He might want to confirm that the peril of providing a Government guarantee was the possibility of entailing a huge payout to a US-based hedge fund, which was the largest creditor for Harland & Wolff. What is happening to the contract value for the FSS deal? It was priced at about £1.6 billion. Has that contract value now gone up? Crucially, what does the Secretary of State envisage for Harland & Wolff after that enormous contract is safely and soundly delivered?

[Jonathan Reynolds]

I thank the Select Committee Chair for his kind words. I am delighted that we have been able to secure this future for Harland & Wolff. His assessment is right that the largest creditor to Harland & Wolff when we took office was Riverstone, a significant US hedge fund. He is right to say that had we gone ahead with that Government guarantee or loan, there would likely have been no real return to the taxpayer—no guarantee of jobs, shipyards or ships being built. That money would have gone to the creditors. Actually, in the commercial market-based solution that we have been able to broker, all creditors have behaved responsibly, but, understandably, if anyone thinks the Government will come along and give them free money, they will hold out for that option. That was why it was so important to make that decision early on to secure this far better outcome.

On the specific question, and I should have directed my answer to the shadow Secretary of State, the hon. Member for Arundel and South Downs (Andrew Griffith), there is no change to the UK-based content of the contract. As I said in the statement, there have been some changes on commercial terms, although they are relatively minor based on the overall value of the contract.

On the future, I can tell the right hon. Member for Birmingham Hodge Hill and Solihull North (Liam Byrne) that the deal we have brokered guarantees not only all four yards, but the jobs in the Belfast yard for three years and jobs in the three other yards for two years. We therefore have a chance not just for new investment coming into those yards, but for the long-term future to be secured for a pipeline of work and energy and defence contracts, which is a vibrant and successful opportunity for the future.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Liberal Democrat spokesperson, who has up to two minutes.

[Steve Darling (Torbay) (LD)]

This is an outstanding Christmas present for the 1,000 employees from Devon to the Isle of Lewis who will benefit from this decision and the deal that has been pulled off by the Government. In the west country, we have a low-wage economy, and in the Appledore dockyard, which is not too far from my constituency of Torbay, this will go down extremely well, so congratulations are in order. That is in sharp contrast with the failure of the previous Administration on implementing an industrial strategy, supporting our shipping industry and growing our economy over many years. The position that the Conservatives are taking now is utterly shameful. How can we hardwire that long-term support for our shipping industry so that we see growth in this area and support for industries such as steel manufacturing?

[Jonathan Reynolds]

I am extremely grateful to be able to deliver that outcome for the hon. Gentleman’s constituents as a result of the announcement. He is right to say that successful UK Government policy must be about more than one-off solutions to specific problems such as this. That is why we have adopted an ambitious industrial strategy that covers key sectors of the economy and delivers exactly what he has asked for: consistency, long termism, and policy that covers every aspect of government rather than being seen as led by one Department. When we get it right, good long-term and effective public policy—working hand in hand with the private sector—delivers tremendous outcomes for the country, and that is what we are seeking. Ultimately, any strategy is only as good as its delivery, and this statement is evidence that the Government will deliver.

[Mrs Emma Lewell-Buck (South Shields) (Lab)]

Today’s news is welcome. My right hon. Friend knows how vital the FSS ships are to our Royal Navy. RFA Fort Victoria, our only remaining solid store support ship, is due to be decommissioned in 2028, yet even before this rescue deal, new FSS ships were not due to enter service until 2032. Is there any scope at all to accelerate that and close the capability gap?

[Jonathan Reynolds]

I am grateful to my hon. Friend for her expertise and insight on this matter. I understand the point that she makes, but it is perhaps one for my colleagues in the Ministry of Defence. I will ask them to engage with her on those ambitions to remedy the absence of capability, but I believe that that would be challenging.

[Mark Pritchard (The Wrekin) (Con)]

I welcome the statement, and particularly the protection of the fleet solid support programme, but I join my Front-Bench colleague, my hon. Friend the Member for Arundel and South Downs (Andrew Griffith), in saying that we will have to wait to see the details. In principle, however, the deal sounds very encouraging indeed, and I congratulate the Secretary of State and all his team and officials for getting it over the line. He mentions world-class shipbuilding in the UK. He said from the Dispatch Box that national security is the foundation of the plan for change, and his Department’s online statement talked about sovereign capability, but does he accept that without steel, ships cannot be built? Will he take this opportunity to say what more can be done, in a dangerous world, to reduce the UK’s increasing reliance on imports from elsewhere, including from Sweden and Asia, so that ships can be delivered in times of conflict or war?

[Jonathan Reynolds]

I very much share the right hon. Gentleman’s aspirations. He will know that most defence steels are higher end—they are specialised and tend to come from electric arc furnaces—and one challenge that we have inherited relates to the two remaining blast furnace sites in the UK. We have improved the situation in Port Talbot, but we could not change direction, with the blast furnaces going offline before the arc furnace was installed. We have inherited an even more challenging position in relation to Scunthorpe, but we are working closely with the company to find a solution.

I believe that we are missing real capabilities in the UK. I can see the economic and business case for plate mill, for instance, and for the long-term question of direct reduced iron in steel production. The steel strategy is part of delivering on that. A whole range of horizontal policies, particularly on energy prices, would have to be in a corresponding position for us to do that. The fact that the UK has such a small steel sector relative to the size of our economy makes us an outlier among developed nations and suggests that there is a real evidence base for improving it, and I will work with any Member of the House to deliver that.

[Richard Baker (Glenrothes and Mid Fife) (Lab)]

Merry Christmas, Madam Deputy Speaker. This is a great Christmas for Methil. I thank the Secretary of State for Business and Trade, the Secretary of State for Scotland, and all those in Government who have worked so hard to secure this deal, which has saved 200 skilled jobs and apprenticeships at the Methil yard in my constituency, and 150 jobs at Arnish in the constituency of my hon. Friend the Member for Na h-Eileanan an Iar (Torcuil Crichton). Does the Secretary of State agree that it is vital that all levels of Government, trade unions and stakeholders in the future of the Methil yard continue to work together so that, with GB Energy headquartered in Scotland, the yard can fulfil its huge potential in contributing to our ambitions for growth in the renewables industry in Scotland and the UK?

[Jonathan Reynolds]

I thank my hon. Friend for all his support and repeated submissions to the Department. I know how significant this matter is for his community, and he has fulfilled his role as a Member of Parliament in articulating it at every level of Government. I say the same for our hon. Friend the Member for Na h-Eileanan an Iar (Torcuil Crichton)—I visited the Arnish shipyard during the election campaign. It is so important in a job such as mine, and in a Department such as mine, to recognise that we must deliver for the whole United Kingdom. The diverse challenges we face do not detract from the fact that we must deliver for every part of the UK, and that is what we plan to do.

I also thank my hon. Friend for his comments about my officials, who worked very hard to deliver this outcome. I agree with him about the huge potential out there not just for shipbuilding, fabrication and maintenance, but for energy in particular. There is real optimism for the future, but it requires the kinds of foundations that we have put in place through this agreement.

[Sir Bernard Jenkin (Harwich and North Essex) (Con)]

I add my congratulations to the Government for getting this agreement over the line, but when will we get their defence industrial strategy? So far we have had only a rather lengthy statement of intent. We need to reindustrialise our defence industrial base in order to face modern challenges, and that is particularly essential given the threats we face from the east of Europe at this time. That is very difficult to do in government, because the Treasury hates his stuff, as the Secretary of State may already have discovered, but we will hold him to account on what he described as leading this sector into future growth, and indeed on reindustrialising our steel industrial base and so on, so that we have the self-sufficiency that is vital for the defence of the country.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I encourage the Secretary of State to be brave in responding to the point about the Treasury.

[Jonathan Reynolds]

Absolutely, Madam Deputy Speaker. I very much welcome the question and would like to put on the record that I have only good things to say about His Majesty’s Treasury at all times. [Laughter.] It is true; I mean that. The hon. Gentleman is absolutely right to say that there is great imperative—with a particular degree of responsibility in the defence part of the industrial strategy—in the challenges we face. It is imperative not just that we work closely with colleagues in the Ministry of Defence on procurement issues and Government-to-Government sales, in which my Department plays a major role, but that we address wider regulatory issues.

As the hon. Gentleman may know, the Department recently did work on environmental, social and governance criteria to ensure that they do not prevent investment into defence companies. There are issues with small and medium-sized enterprises in the defence sector struggling to access bank accounts—not through a prohibition on defence, but perhaps because of a lack of understanding about such commercial contracts being different from those in other parts of the economy. There are a whole range of issues that we must get right, but I think that, in the main, Members across the House share his aspirations and objectives. He has been a voice of expertise and authority on these issues throughout my time in Parliament, and I am grateful for his engagement on them.

[Amanda Martin (Portsmouth North) (Lab)]

Today’s announcement will surely be well received by the House, the country, the Royal Navy and the workers directly affected, especially given the previous Government’s lack of industrial strategy. Alongside the fantastic announcement for seafarer and worker conditions and protections, the agreement shows the Government’s commitment to the vital maritime and industrial sector. Shipbuilding was once a proud industry and the backbone of the community in my city of Portsmouth, but it was decimated by the previous Government. What assessment has the Secretary of State made of the deal’s wider implications for the UK economy, and specifically for the shipbuilding and defence sectors?

[Jonathan Reynolds]

I recognise the role that shipbuilding has played in my hon. Friend’s city. I grew up in Sunderland —part of what was once one of the major civil shipbuilding locations in the world—and I recognise the identity and pride that comes with that industrial heritage. In many cases, people feel that it is something of the past, but in this statement we are stressing exactly what she said about the contemporary contribution and the opportunities for the future, about which we should be excited. There are a whole range of increasing needs to shipbuilding expertise, particularly in the energy sector—offshore wind, for example, creates a range of demand for different types of maintenance and supply vessels—so this should be an optimistic story for the future. Sometimes I feel that the wider British public perhaps do not understand the number of jobs or the economic benefit that come from such a sector, so it is always good to make that case from the Dispatch Box—as my hon. Friend does every day from the Back Benches.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call John Cooper, a member of the Business and Trade Committee.

[John Cooper (Dumfries and Galloway) (Con)]

I congratulate this Front-Bench team and the wider Government on landing this deal in the face of what the Secretary of State has euphemistically called the “headwinds” —I would call them a full-force gale—created by the Budget. Did Navantia raise concerns about the forthcoming Employment Rights Bill? It swings the pendulum very much in favour of trade unions, which, as we know, are very often red in tooth and claw. Was that an issue in landing the deal?

[Jonathan Reynolds]

No, it was not—it is a good try, but no. First, the employment rights framework in most parts of continental Europe is very different from our own. Secondly, as I have repeatedly said, the changes in the Employment Rights Bill do raise terms and conditions for some of the lowest-paid workers in the country, but many companies in the UK—particularly larger ones—already operate to a significantly higher level. Shipbuilding is historically a fairly unionised sector, so I do not think there are any concerns or worries in that field—to be frank, the trade unions in that sector often fought harder for the industry than former Conservative Governments. I understand the try-on point that the hon. Gentleman is making, but no, the Employment Rights Bill has not been a problem. In terms of wider UK Government policy, this has been a great endorsement of our EU reset and our willingness not to revisit the arguments of Brexit, but to work more closely with friends and allies in Europe, to ensure that we are getting the maximum opportunities for the UK and always working in our national interest.

[Mr Mark Sewards (Leeds South West and Morley) (Lab)]

I congratulate the Government on this announcement, which is incredibly welcome news for all those workers who get to keep their jobs as a result. It is a shame that the Conservative Front-Bench spokesman chose to attack the Government over the 2.5% target while responding to the statement, and asked for a timeline for when we are going to deliver 2.5%. Fourteen years is a timeline, and the Conservatives did not meet that target even once. If we are to avoid situations like this in the future, we need to have a modern industrial strategy. What progress have we made towards that strategy? How does it feed into our wider growth mission, and how will it support the UK economy to grow over the next Parliament?

[Jonathan Reynolds]

I am grateful to my hon. Friend for his comments on the deal and for his observations about the questions from the Opposition Front-Bench spokesman about the 2.5% target. On the modern industrial strategy that we are creating, we have had an incredible response to our Green Paper—some 22,000 individual answers to the questions it asked—showing that there is a huge appetite from industry across the board, both in the UK and abroad, to engage with what the Government are seeking to do. Again, I stress that that should always be on a cross-party basis; there is nothing in that Green Paper that anyone of any political stripe should be able to oppose. It is based on our national interest and the goal of being more competitive and business-friendly, succeeding to a greater degree on the world stage.

This week, we had our first meeting of the Industrial Strategy Advisory Council, with some tremendous representatives with expertise across the board—UK industry, academics and business figures. It is an incredibly exciting time. This is just one component of our growth mission, but clearly an important one, alongside areas of work for me such as the small business plan that we are putting together. I genuinely believe that everyone should be excited about the future.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call Alison Griffiths, a member of the Select Committee.

--- Later in debate ---

[Jonathan Reynolds]

I am sorry if the hon. Lady missed it, but I was clear that what we have announced today does not change the provisions in the original contract agreed by the former Conservative Government. What has changed is that we have saved all four of these yards, at a time when we could have lost them all through the inability of the previous Government to take the action required, so it is an incredibly positive story. We have saved the position of those yards and guaranteed those jobs, and not for months but for years to come.

[Chris Law (Dundee Central) (SNP)]

I take this opportunity to wish you a merry Christmas, Madam Deputy Speaker.

I thank the Secretary of State very much for what is wonderful news for all four sites across the UK. Obviously, I am going to be slightly biased towards the two in Scotland, one in Arnish on the Isle of Lewis and the other in Methil in Fife—that is very welcome news in the week before Christmas. I also thank the Government for their co-operation with the Scottish Government over the past months, particularly in the early days when UK Labour had come into government, and I put on record the work that the Deputy First Minister of Scotland, Kate Forbes, has contributed.

I have a couple of questions. First, given that we are moving forward, are the workers’ current terms and conditions going to continue as they are? Secondly, I have listened to what has been said about future contracts. We know that both yards in Scotland will be protected for the next two years, but can the Secretary of State tell us a little bit more about the longer-term sustainable footing, not least because this company has changed hands three times in the past four years?

[Jonathan Reynolds]

I am grateful to the hon. Gentleman for his observations and questions. It was really important to us that we keep all four yards together—there had been an assessment that, for understandable reasons, the Belfast yard was more commercially valuable, so there was a real chance that any unstructured rescue package could have lost the two Scottish yards. There were question marks about those yards in particular, so keeping the business together and protecting the future of those workers was hugely important to us, and I am delighted that we have been able to achieve that.

The job guarantees for the non-Belfast yards will last for two years. The guarantee is for 90% of the overall job numbers, simply to provide the usual degree of flexibility in running that business, but that guarantee covers the majority of the workforce and keeps them in place. The deal also comes with investment in those Scottish yards, so whatever the future holds, those yards will be even more competitive and more able to bid for the kinds of contracts that will secure the long-term prosperity we are all seeking. I am always genuinely willing to work with colleagues across any part of the UK to secure the kind of outcome we have achieved today, and I am grateful to the hon. Gentleman for recognising that.

[Bob Blackman (Harrow East) (Con)]

As someone who has consistently and regularly called for more shipbuilding to take place in the UK rather than be exported, today’s statement is good news, and I congratulate the Secretary of State on announcing this decision. He has clearly said that further orders have been added as a result of this deal. What further defence and—much more importantly—commercial opportunities are there for Harland & Wolff to acquire contracts from across the world, rather than building elsewhere?

[Jonathan Reynolds]

I share the hon. Gentleman’s aspirations and recognise his calls for UK shipbuilding to have a higher priority in future than it has in the past. To be specific on what I was saying in the statement, there has been a revision to the value of the fleet solid support contract; it has required a little bit of additional support—but not greatly and on commercial terms—in order to deliver it. There are not promises of additional work packages on top of the contractual agreements made by the previous Government, but because Navantia UK is such a world-renowned expert builder of shipping of all sizes, as well as the investment that comes with this deal and the more competitive nature of the yards in future, there are genuine grounds for optimism. I see real opportunities in fabrication and maintenance, but particularly in energy. I also think that a little bit of competitive diversification in the military shipbuilding sector’s supply chain is welcome, creating better value for money in procurement. Across the board, this is a positive story for Harland & Wolff and its employees, but as the hon. Gentleman has described, it is also a positive story for UK shipbuilding.

[Jim Shannon (Strangford) (DUP)]

This announcement is really good news, and everybody across the House will welcome it. It is probably time to break out the Christmas cake and the mince pies early, because there is good news coming and the Secretary of State has delivered it today. This morning I spoke to my right hon. Friend the Member for Belfast East (Gavin Robinson), who has worked tirelessly with the company to secure this progress. We all agree that it is great news, particularly for the 1,000-strong workforce in Belfast, and especially in the run-up to Christmas—well done. My right hon. Friend will be at the yard with the Secretary of State for Northern Ireland this afternoon, probably in about an hour’s time.

If the national shipbuilding strategy is to mean anything, it must be that the Government invest in skills and capacity throughout the United Kingdom of Great Britain and Northern Ireland. Does the Secretary of State agree that more could be done to increase research and innovation support across the United Kingdom and, in particular, in Northern Ireland?

[Jonathan Reynolds]

I am grateful to the hon. Gentleman for asking what I think will be my last question of the year. I would particularly like to recognise what he said about his colleague, the right hon. Member for Belfast East (Gavin Robinson). Obviously, he has a constituency interest and a leading role in Northern Ireland, and I think he understood the decisions we had to make. We had to explain in confidence to all colleagues affected why the initial decision on the guarantee alone was not the right way forward, but that we were committed to the kind of solution we have announced today. I am extremely grateful for being able to work with the right hon. Gentleman on that. It is great news that he is going to the yard today; my colleagues the Secretary of State for Northern Ireland and the Minister for Industry are also in Belfast today, and I understand that the Secretary of State for Scotland will be at one of the yards in Scotland too.

On the hon. Gentleman’s point about innovation and research and development, that is the basis on which we have to compete. Whether in the sectors of aerospace, automotive or shipbuilding, what we need is high-end, sophisticated R&D, innovation and world-leading products. That is what we have in many of our advanced manufacturing sectors, but it is such a competitive world that we have to maintain that edge. In particular, R&D is an area where core support and core funding between Government and industry has real benefits. We have seen that in lots of sectors—maybe not to the degree we have needed in shipbuilding, but let us look at that for the future and approach the next year with some real positivity.

Progress Towards a Modern Industrial Strategy

Jonathan Reynolds Excerpts

Tuesday 17th December 2024 Written Statements

[The Secretary of State for Business and Trade (Jonathan Reynolds)]

I am delighted to confirm today that the Chancellor and I have appointed a diverse group of the UK’s top business leaders, policy experts and trade union leaders to the Industrial Strategy Advisory Council. The Chancellor and I will join the council for the first meeting later today. This is a key milestone on the path to delivering our new, modern industrial strategy—a key pillar in the growth mission of the Government. The Council will hardwire stability and long-termism into our plan from the start.

Members will use the first meeting to discuss investment, innovation and breaking down barriers to growth as well as emerging themes in response to the industrial strategy Green Paper. This comes shortly after the end of the industrial strategy consultation period, where we received responses from businesses, international investors, unions and others up and down the country to help shape the strategy.

The Government announced the appointment of Clare Barclay as chair of the Industrial Strategy Advisory Council on 13 October 2024. As the president, enterprise and industry, EMEA at Microsoft, Clare is well placed to lead the work of the council, bringing a wealth of leadership experience from the top flight of business.

The Chancellor and I are delighted that 15 of the UK’s business leaders, academics, policy experts and trade union leaders have joined the council to support Clare in this vital work. I have also asked Professor Dame Nancy Rothwell to be the deputy chair of the council. The interim chair of Skills England and the chair of the national wealth fund will be ex-officio members of the council, to ensure close working between these bodies.

The full list of Industrial Strategy Advisory Council members is:



Clare Barclay, President, Enterprise and Industry, EMEA, Microsoft (chair).

Professor Dame Nancy Rothwell DBE, former Vice-Chancellor of the University of Manchester (deputy chair).

Kate Bell, Assistant General Secretary of the Trades Union Congress.

Right hon. Greg Clark, former Secretary of State for Business, Energy and Industrial Strategy.

Professor Dame Diane Coyle DBE, Bennett Professor of Public Policy, University of Cambridge.

Dame Anita Frew DBE, Chair, Rolls-Royce Holdings.

Greg Jackson CBE, CEO, Octopus Energy.

Sir John Kingman, Chair, Legal & General and Chair, Barclays UK.

Tunde Olanrewaju, Senior Partner, McKinsey.

Professor Henry Overman, Professor of Economic Geography, LSE.

Henrik L. Pedersen, CEO, Associated British Ports.

Aislinn Rice, Non-Executive Director of Analytics Engines.

Roy Rickhuss, General Secretary, Community.

Baroness Vadera (Shriti Vadera), Chair, Prudential pic and Chair of The Royal Shakespeare Company.

Chris Grigg CBE, Chair of the National Wealth Fund (ex-officio).

Richard Pennycook CBE, interim Chair of Skills England (ex-officio).

The council will make and publish recommendations on the development and implementation of the industrial strategy, a cross-Government strategy supported by engagement with stakeholders. This will include an annual report which will be laid before Parliament. My Cabinet colleagues and I will carefully consider these recommendations. Focusing on growth-driving sectors and how the pro-business environment can help them thrive, the Council will also monitor and evaluate the impact of policies, with data and analysis central to this mission.

The council will initially focus on supporting development of the industrial strategy, including proposals to break down barriers to growth. To achieve this, I have asked the Ccuncil to make initial recommendations for consideration by the Chancellor and me to inform discussions at the Growth Mission Board.

The Government have committed to work in partnership with the devolved governments to make this strategy a UK-wide effort.

To underline our commitment to build the long-term certainty and stability that businesses need to invest, we will legislate to place the Council on a statutory footing as soon as parliamentary time allows.

On 14 October, the Chancellor of the Exchequer and I published a consultation on our new, modern industrial strategy: a credible 10-year plan to deliver the certainty and stability businesses need to invest in the high-growth sectors that will drive our growth mission.

We also set out our vision to create a pro-business environment, support high-potential clusters across the country and deliver growth that is supportive of net zero, regional growth, and economic security and resilience. I continue to work closely with the Chancellor and my Cabinet colleagues to ensure we make it simpler and easier for business to invest, thrive and grow.

The consultation underscores our intention across Government, and through the council, to design and implement the strategy in lockstep with local leaders, mayors, and devolved leaders across all corners of the UK.

The consultation closed on 25 November 2024. The Department for Business and Trade and HM Treasury will now consider responses in partnership with teams across Government. The response to the consultation will be integrated into the final industrial strategy and growth-driving sector plans, to be published alongside the spending review in 2025.

[HCWS319]

Oral Answers to Questions

Jonathan Reynolds Excerpts

Thursday 12th December 2024 Commons Chamber

[Dr Neil Shastri-Hurst (Solihull West and Shirley) (Con)]

3. What steps he is taking to help improve business confidence.

[The Secretary of State for Business and Trade (Jonathan Reynolds)]

The Government were forced to make difficult choices in the Budget, but the fundamentals of doing business in the UK remain strong. The Government’s agenda of creating an industrial strategy, getting people back to work, reforming our planning system, rebuilding our relationship with the EU, pensions reform and more, is entirely focused on improving the long-term business environment across the UK.

[Dr Shastri-Hurst]

In the aftermath of the Budget, I spoke with many business leaders in my constituency of Solihull West and Shirley. Invariably, they told me that they are pausing recruitment and freezing their growth plans as a direct consequence of the decisions made around taxation and the Employment Rights Bill. What does the Secretary of State say to those businesses in my constituency that no longer have confidence in the Government and feel abandoned by their policies?

[Jonathan Reynolds]

I say that the Budget was seven weeks ago, so if the Conservative party, which did not tell us how it would pay for the promises it made when it was in government, now has a plan to pay for those promises, I would welcome receiving it in writing, or hearing it here at oral questions or in a statement. The raw reality is that the Conservative party made promises that it had no intention of keeping. We are not going to do that; we will fix the foundations and do what we say. The reason this Government will succeed on growth and business investment in a way that the previous Government did not has to do with the fundamentals: the return to political stability in the UK; an openness to the rest of the world, including the EU—a difficult subject for Conservative Members, I know—which is still our major trading partner; and the willingness of this Government to use their mandate to improve the business and investor environment. Those fundamentals mean that the future of the UK is very promising.

[Sarah Coombes (West Bromwich) (Lab)]

Steel manufacturing is a vital west midlands industry, but business confidence is being dented by retrospective charging of steel safeguarding duties by His Majesty’s Revenue and Customs. Companies that are affected in my constituency and elsewhere feel that such duties were unfairly and wrongly imposed on them during the chaotic Brexit transition period. They tried to work with the last Government, but got nowhere. Given the importance of the steel sector to British industry, will the Minister work with the Treasury to resolve the issue, and ensure that these vital businesses are protected from hefty bills that they should never have been sent in the first place?

[Jonathan Reynolds]

I thank my hon. Friend for raising that important matter. Given the sums of money involved, I can understand why that is a substantial issue for businesses in her constituency. It relates to the duties that were charged at a time of significant political uncertainty. This is a Treasury issue relating to taxation, but I promise we will get her the meeting she needs, and work with her to ensure that she gets the answers she requests for her constituents.

[Mr Speaker]

I call the shadow Minister.

[Greg Smith (Mid Buckinghamshire) (Con)]

There is no clearer pointer on business confidence than the Bank of England’s recent survey on employers’ responses to the Budget. Some 59% expect lower profit margins; 54% expect to raise prices; 54% expect lower employment; and 38% expect to pay lower wages than they otherwise would have. Now City AM reports that Labour has carelessly lost all its business backers. Will the Secretary of State show any contrition, admit that business confidence is through the floor, and start standing up for business, rather than the Treasury?

[Jonathan Reynolds]

Well, what can I say? Was it the Conservative party that increased corporation tax from 19% to 25% in one Budget, and that crashed business investment and confidence because of the way it mishandled Brexit, failing to prepare for either outcome of a yes/no referendum? And which Opposition Front Benchers played a role in the mini-Budget? Frankly, it was all of them. With respect to the hon. Gentleman, I will not take advice from him. Since the Budget, I have heard repeatedly from Conservative colleagues that they want to lower taxes and increase spending, even though they cannot account for the promises that they made when in government. That is not credible unless they engage with reality, as this Government are doing. Whether it is the response to the Chancellor’s speech at Mansion House or finally sorting out Marks & Spencer this week, this Government are getting on with the job and looking to the future.

[Greg Smith]

Sorry seems to be the hardest word. [Interruption.] I am talking about the Government’s Budget. Further proof of how low business confidence is getting under this Government was given in evidence to the Employment Rights Bill Committee. Jane Gratton of the British Chamber of Commerce predicted

“a reduced hiring appetite were this legislation to come in, and that”

their members

“would be less likely to recruit new employees due to the risk and difficulty, particularly under the day one rights”.––[Official Report, Employment Rights Public Bill Committee, 26 November 2024; c. 8, Q2.]

If business confidence is low, employment goes down. We already know that every Labour Government leave unemployment higher than when they took office, but is it not a bit extreme for this Labour Government to legislate for that outcome?

[Jonathan Reynolds]

If the hon. Gentleman googles that statistic, he will find that it is not actually true, but I appreciate that it is demanding being in opposition, and that there may not always be the capacity and resources required. As we heard on the excellent Second Reading of that legislation, the vast majority of employers in the UK already operate to a higher standard than the level to which the floor is being raised in the Employment Rights Bill. I do not in any way pull back from saying that some of the most vulnerable, insecure and low paid members of our society will benefit from the Bill; that is exactly what it is about. Those people may have given up on politics or think that the mainstream political system will not deliver for them. I reject the claim that certain industries require a supply of labour from jobs that do not give people the security and dignity that they need. This is a set of proportionate, reasonable reforms that will make a difference—

[Mr Speaker]

Order. I have a list of speakers here. I call Munira Wilson.

--- Later in debate ---

[Darren Paffey (Southampton Itchen) (Lab)]

12. What steps his Department is taking to support small businesses.

[The Secretary of State for Business and Trade (Jonathan Reynolds)]

Small businesses are the beating heart of our high streets and communities, and are essential to our economic success. That is why, on Small Business Saturday, I announced the business growth service, which will ensure that businesses across the UK get quicker and easier support and advice from Government. Further announcements include the disability finance code for entrepreneurship to improve access to capital and tackle inequality for disabled entrepreneurs. A new fair payment code was launched by the Office of the Small Business Commissioner to help address late payments. Next year, as my hon. Friend has said, the small business strategy will be published to create thriving high streets, easier access to finance, open overseas and domestic markets and enhanced business capability.

[Alice Macdonald]

Small and medium-sized businesses come in many forms, from microbusinesses to community interest companies and co-operatives. Often, co-operative and mutual business models are overlooked. Norwich has a proud history of co-operatives. Will the Secretary of State reassure me that co-operative and mutual business models will be properly included in this Government’s much-needed push to support small and medium-sized businesses?

[Jonathan Reynolds]

I very much welcome my hon. Friend’s question. My area on the eastern side of Greater Manchester has, like hers, a huge history of co-operatives and mutuals. The diversity in business models that they bring is a huge strength; they bring different things to the market and different ways of doing business. The resilience in co-operative models is particularly attractive. I can assure her that they form part of the Government’s wider strategy. Our ambition is to double mutuals’ size in the economy. The Under-Secretary of State for Business and Trade, my hon. Friend the Member for Harrow West (Gareth Thomas), the small business Minister, is leading on that work, and I would love my hon. Friend and businesses from her area to be involved in it.

[Darren Paffey]

Last week, I had the pleasure of visiting the winners of my first Small Business Saturday awards in Southampton Itchen. They were Riann Care, The Bunker, Miss Ellie’s Café and Julie’s Dance Studio. Will the Secretary of State join me in congratulating them on their role in ensuring a thriving local economy? What assurances he can offer them that this Government have the back of small businesses?

[Jonathan Reynolds]

I am extremely grateful to my hon. Friend for his question. I certainly join him in congratulating those local businesses on their work and, indeed, all Members of Parliament on the work that they do on their constituency days to champion and support local businesses. The Government’s agenda includes long-term reform of business rates to create permanently low business rates for retail, hospitality and leisure. The launch of high-street rental auctions, getting rid of derelict property in town centres, is also hugely exciting. The business growth service is predominantly about recognising that although the Government do a lot, businesses can often find it hard to access exactly what they need. I have looked around the world—to the US and its Small Business Administration, and to Singapore and its Enterprise Singapore, for example—to discover the best models. That is what we will take forward in 2025, and I find it a hugely exciting agenda.

[Wendy Morton (Aldridge-Brownhills) (Con)]

Last Saturday was indeed Small Business Saturday. It was an opportunity for us to celebrate and support the many small businesses in our constituencies. However, too many of them are really worried about the increase in national insurance contributions—the £25 billion jobs tax—and there is simply no easy answer for them. They cannot just put up their prices, so they are looking at staffing levels. Why are the Government so against aspiration, and how do they think they will improve productivity and deliver growth in the economy?

[Jonathan Reynolds]

Conservative Members know what they left behind, and I have not heard any of them offer an alternative. The specific answer to the right hon. Member’s question is that employment allowance was doubled in the Budget and the threshold was taken off. That is why 1 million, mainly smaller, businesses are paying less or the same in national insurance contributions as they were before the Budget. She should tell the House how the Conservative party would pay for the infected blood scandal—the victims of which we are all committed to compensating—Post Office compensation, support for the steel industry, and the advanced manufacturing plan that we inherited, because none of that was in our departmental budget. We are fixing the foundations with long-term public investment and an agenda based on higher business investment and better, stronger economic growth in every part of the UK.

[Sir Ashley Fox (Bridgwater) (Con)]

The Government have raised national insurance charges on employers and introduced a family farm and a family business tax. The Employment Rights Bill will raise business costs by £5 billion, predominantly for small businesses. As a result of those changes, does the Secretary of State believe that SMEs will employer more or fewer people?

[Jonathan Reynolds]

I have absolutely no doubt that the Government’s agenda is one for employment, business investment and growth. Some of the things that this country needs the most could only have been delivered by a change of Government. I simply do not believe that the Conservative party is capable of reforming the planning system or having a long-term industrial strategy, fixing our relationship with the European Union, and all the rest of it. Yes, there have been challenges, but the Conservatives know what they left behind. They knew what they were doing. There is a reason the Conservative party had no spending plans for the next financial year. We have had to confront that reality, but we cannot have the kind of success that this country needs unless we are willing to fix the foundations and focus on the long term. The Chancellor did that in the Budget, and the agenda of the Department for Business and Trade is extremely attractive for the future.

[Mr Speaker]

I call the shadow Minister.

[Dame Harriett Baldwin (West Worcestershire) (Con)]

Some of the most successful small and medium-sized businesses, which truly think long term, are owned by families, so why does the Secretary of State think that it will help his long-term growth mission for the Government to start taxing those businesses when they get passed on to the next generation?

[Jonathan Reynolds]

With respect, I hear a lot of calls from the Conservatives to cut taxes and increase spending, but still no account of how they would do that. I appreciate that sometimes the initial transfer into opposition can feel exhilarating, but there is a responsibility that comes with it. I would like to see an account from the Conservatives of how they would pay for it.

For all tax changes across the board, we can still say with real confidence that the UK has a competitive tax system—benchmark our corporation tax, and the allowances on it, our capital gains taxes and, in this case, our inheritance taxes. The mistake that the Conservatives make is that they forget that the adjustments to specific reliefs for businesses and agricultural property are on top of the existing inheritance tax thresholds. Frankly, a little less scaremongering from the Opposition and a bit of focus on what is really at stake would be welcome.

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[Sarah Gibson (Chippenham) (LD)]

Small businesses are at the heart of our local communities. Firms such as Carbon ThreeSixty in my constituency are cutting-edge manufacturers of carbon fibre products. However, its growth as a small business is seriously affected by its ability to attract and retain quality staff, predominantly because of the poor public transport and completely non-existent cycle routes. These issues cut right across Departments. I would therefore be grateful if the Secretary of State could confirm what discussions he has had with ministerial colleagues in other Departments about how rural transport infrastructure would greatly support small and medium-sized businesses.

[Jonathan Reynolds]

I welcome the hon. Member’s question. She is right that some of the issues that most affect businesses in our constituencies often sit in other Departments. The role of my Department is to focus on and champion those issues across all of Government, whether they sit neatly in the Department or not. She correctly highlights the incredible and important role that rural businesses play, and their social as well as economic benefits. Her points about transport were well made. One of the big changes in the Budget was the ability to focus on long-term investments, which was recognised by the Office for Budget Responsibility in its assessment that the productive potential of the UK will grow significantly over the next decade because of that increased focus—investment, investment, investment. Transport is a great element of that, whether in my constituency or in hers. I assure her that the needs that she articulates are considered at the highest levels of Government.

[Callum Anderson (Buckingham and Bletchley) (Lab)]

9. What steps his Department is taking to support the delivery of the funding plans outlined in the Chancellor of the Exchequer’s Mansion House speech.

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[Alex Baker (Aldershot) (Lab)]

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Business and Trade (Jonathan Reynolds)]

It has been a hugely significant six months for the Department for Business and Trade. After our record-breaking international investment summit and our industrial strategy Green Paper publication, my Department has been engaging with businesses big and small to drive growth. Just this week we have helped to land a £500 million train-building deal with Hitachi, securing hundreds of jobs in the north-east—another promise fulfilled from the election campaign. For smaller businesses we are reforming business rates to breathe new life into our high streets, while launching a new fair payment code, tackling late payments to SMEs, and supporting new high street rental auctions to improve town centres. As we have heard, our brand new business growth service will streamline SME support on everything from finance to exports.

We are also tackling the challenges that we inherited, negotiating a better deal for Tata Steel employees in Port Talbot, while progressing a UK-wide steel strategy. Our Horizon convictions redress scheme shows that we are righting the wrongs of the past for victims of the Post Office scandal. I look forward to working with all hon. Members in the new year, delivering on our plan for change, going for growth, and realising a decade of national renewal. In addition, Mr Speaker, I would like to wish you, all hon. Members, and businesses across the UK a very merry Christmas.

[Mr Speaker]

Thank you, very kind.

[Alex Baker]

My constituents still mourn the loss of our M&S outlet in 2015, but we are delighted that Superbowl UK has just opened in Aldershot. These anchor retail and leisure tenants are so vital for our town centres, so what can the Government do to assist communities such as mine to ensure that we can encourage businesses to be the cornerstone and footfall drivers of our town centres?

[Jonathan Reynolds]

I very much agree and welcome the question from my hon. Friend. I certainly recognise that high streets are going through a transition from being primarily retail centres to now having much more of a mix of retail, hospitality and leisure, and I am delighted to hear about Superbowl’s investment in Aldershot. I am not nostalgic for a town centre or a high street that has passed; it is about how we do that transition into the future. There is great practice around the country, whether in Aldershot or in Walthamstow, where I was recently, and the Government’s agenda is committed to delivering that.

[Mr Speaker]

I remind the Secretary of State that these are topical questions, and contributions should be short. I come to the shadow Secretary of State for a good example.

[Andrew Griffith (Arundel and South Downs) (Con)]

One of the great British innovations is the gift of free trade, lifting billions out of poverty abroad and increasing prosperity at home. Thanks to the Conservatives, this week the UK proudly joined the comprehensive and progressive agreement for trans-Pacific partnership, a bloc that includes some of the world’s fastest-growing economies, as well as major trading partners and investors, such as Japan and Canada. With the Government having precious little else to show on growth so far, will the Secretary of State update the House on when he expects to conclude free trade deals with the Gulf, with India and with the US?

[Jonathan Reynolds]

At least we have some things we can agree on there, which is a nice start to the Christmas period. I agree that the UK has always been and must be a champion of free trade in a world where trade issues will be politically significant in 2025. We can work together on that future. We believe that we have progressed the Gulf Co-operation Council trade deal significantly. The shadow Secretary of State will know that there were some problems between the previous Government and some countries in the GCC, particularly the UAE, where the relationship had unfortunately got into a difficult place. We have repaired that and the talks are going well. It is always a mistake to put a deadline on those, because it can limit our negotiating potential. When it comes to the US, we will see what happens with the President-elect, but I am looking forward to negotiation and discussion about that.

[Mr Speaker]

Come on, Secretary of State.

[Andrew Griffith]

The Secretary of State can count on our support to bring those deals forward. It pains me to say it, but as we have heard today, business confidence is at an all-time low, bar the pandemic. Hiring is collapsing and companies are fleeing. Labour has talked growth, but it has delivered decline. The one game changer now would be a US trade deal. Will the Secretary of State urge the Prime Minister to stop obsessing about going backwards into the EU and agree with me at this Christmas time that the best gift for British business would be for the Prime Minister to get on a plane to Washington and talk trade with President Trump?

[Jonathan Reynolds]

I am afraid that the shadow Secretary of State’s analysis is too simplistic. The US is a major trade partner and always will be, but he will know that so is the European Union and another area is our trade with China. The future for the UK is being positioned to get the maximum benefit from all those key markets. The kind of agreement that he puts forward would have major ramifications for British agriculture in particular, and he knows the issues associated with that. We cannot consider one of those trade negotiations without considering the impact on all those key trading relationships. I ask him to consider the issue in a more holistic and complete way.

[Mr Alex Barros-Curtis (Cardiff West) (Lab)]

T2.   Further to the successful international investment summit that my right hon. Friend mentioned earlier, which secured £63 billion-worth of investment for the UK, the First Minister of Wales, Eluned Morgan, has recently announced that Wales will hold its own major investment summit next year. Does my right hon. Friend agree that this demonstrates the power of two Labour Governments working together in partnership to deliver economic growth for the communities we represent?

[Jonathan Reynolds]

I might be biased, but I thought that the international investment summit that we held was the best day of this year. That was not just because of the investment and the real tangible jobs that came from it, but because of the clear, simple message that we could put out there: stability, openness and improving the investment environment. I am delighted to hear the news from Wales. Not only will we support that, but I appreciate the strong working relationship we have on such issues as Port Talbot and getting a better deal for that community and the workforce. We have worked hand in glove with the Welsh Labour Government, and it strengthens the things we are able to do together.

[Mr Speaker]

I call the Liberal Democrat spokesperson.

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[Perran Moon (Camborne and Redruth) (Lab)]

T5.   I declare an interest as an officer of the all-party parliamentary group on critical minerals. Although Cornwall sits on some of the richest deposits of critical minerals in the world, including tin and lithium in my constituency of Camborne, Redruth and Hayle, there are significant geological reserves right across the United Kingdom, including in the north of England, Northern Ireland and the lands of our Celtic cousins in Wales and Scotland. Will the Minister confirm that domestic critical mineral production and processing will form a key part of the Government’s industrial strategy?

[Jonathan Reynolds]

I welcome my hon. Friend’s question, and I welcomed the time we spent together at South Crofty tin mine, which was also one of my favourite visits of the year. This is a hugely exciting area, and the opportunities for his area are particularly exciting. What we need is an open, transparent trading system where these products will have the certainty of access to markets, which will unlock the ability to use those deposits to our and our allies’ mutual interests.

[Calum Miller (Bicester and Woodstock) (LD)]

T3. Farmers in my constituency maintain the highest animal welfare standards. They want reassurance that those will not be undercut by any future UK-US trade deal as they were by some of the deals done by the previous Government. Will the Minister assure me that the mandate and the detail of a trade deal will come to the House before the Government sign it, as many Members on the Government Front Bench agreed when they were in opposition? If not, why not?

--- Later in debate ---

[Jonathan Reynolds]

I recognise what my hon. Friend is saying in her question, which is that skills will be one of the biggest, if not the biggest issue for businesses going forward. Of course, that sits in the Department for Education and we work closely with colleagues on that. We have the creation of Skills England and the reforms to the apprenticeship levy to create the growth and skills levy. Indeed, I think that my CEO call next week—I do those regularly—will be with the Secretary of State for education, where we will discuss this problem. Businesses from her constituency would be welcome to join that.

[Alison Bennett (Mid Sussex) (LD)]

T4. I am sure that the Secretary of State agrees that creating high-value jobs in science and technology is important. In local business, our local plan gives us the opportunity to build a science and technology park delivering over 5,000 high-value jobs, but we cannot proceed until the Department for Transport releases funds for local highway improvements. Will the Secretary of State press the Secretary of State for Transport to take action so that work can progress and we can deliver jobs and growth in Mid Sussex?

[Jonathan Reynolds]

The hon. Member’s question is perhaps more for the Secretary of State for Transport, but she skilfully put that to me. I assure her that I will work with the Secretary of State for Transport to do that. How we assemble investment sites is a huge issue, and how we can work better across Government with local partners is also a key issue for us.

[Chi Onwurah (Newcastle upon Tyne Central and West) (Lab)]

T7. Last week, research published by Sage showed that 84% of small businesses in the north-east plan to increase their investment in technology next year. As the Science, Innovation and Technology Committee launches its inquiry into innovation, growth and the regions, how will the Business Secretary ensure that the industrial strategy boosts adoption of technology—particularly British-developed technology—to boost growth across all our regions?

[Alison Griffiths (Bognor Regis and Littlehampton) (Con)]

Businesses in Bognor Regis and Littlehampton are at the sharp end of the Bank of England’s business confidence survey. Unlike the Chancellor and the Secretary of State, they know that her Budget and the Employment Rights Bill are a recipe for higher prices, higher inflation, higher interest rates and higher unemployment. Is that the growth that the Secretary of State had in mind?

[Jonathan Reynolds]

We have had seven or eight of the same question from the Opposition Benches, and not a single answer to how they would pay for the promises that they make. We are getting on with fixing the foundations, looking to the future and improving the business environment across the board. That is why businesses in the hon. Lady’s area and mine should look to 2025 with real confidence.

[Euan Stainbank (Falkirk) (Lab)]

I declare an interest as co-chair of the all-party parliamentary group on British buses. The Secretary of State will be aware of the consultation on 160 jobs at Alexander Dennis in my constituency. In September, it cited an increasingly unlevel playing field over a number of years for domestic bus manufacturers. That shows the requirement for a clear industrial strategy. What assurances can the Minister give me, as part of implementing the industrial strategy, that the Labour Government are working to level the playing field for domestic manufacturers?

[Jonathan Reynolds]

I recognise the issue and I welcome my hon. Friend’s raising it at the annual dinner of the Society for Motor Manufacturers and Traders. It matters to this Government that we make these products in the UK. There have been specific procurement issues, mainly with local areas. I promise him the meeting that he needs to take that forward, but I assure him that the industrial strategy will cover this issue.

Business Growth Service

Jonathan Reynolds Excerpts

Monday 9th December 2024 Written Statements

[The Secretary of State for Business and Trade (Jonathan Reynolds)]

Small businesses are the beating heart of our high streets and our communities and are essential to our economic success. There are 5.5 million small businesses in the UK—99.8% of all businesses—accounting for 16.6 million jobs and £2.8 trillion annual turnover. Small businesses exported £107.9 billion of goods in 2023. They are also fundamental to regional development and our ability to secure growth and good jobs.

That is why I am delighted to announce that my Department will launch the Business Growth Service in 2025. The Business Growth Service will make it simpler for businesses across the UK to get the help they need to grow and thrive in today’s economy and into the future.

Inspired by successful international examples, the Business Growth Service will simplify a fragmented array of SME support under a single, trusted banner to give firms an easy path to the help they need.

This Government were elected on a promise to restore economic stability and deliver the change people need in their local communities. Working in partnership with local and devolved governments across the UK, and partners such as the Growth Hubs network, Innovate UK, and the British Business Bank, the Business Growth Service will provide direct support and introduce SMEs to other relevant services and providers they need to grow.

The Business Growth Service will work with the Government’s international network to support and advise companies on how to grow overseas.

My aim is for the service to be up and running in the first half of 2025.

There is a wide range of support available for businesses across the UK, but all too often small and medium-sized enterprises (SMEs) are faced with barriers when they try to access it. The Business Growth Service will remove these barriers, providing businesses with the help and support they need to unlock their potential for future growth.

In the coming months, my Department will be consulting widely with businesses, representative bodies, experts, the devolved governments and local government in the design, development and implementation of the Business Growth Service.

I will update Parliament on progress again in due course.

[HCWS287]